In 2017, Philip Morris International (PMI), announced their intention to transition away from conventional cigarettes.
“We decided to build our future on smoke-free products that are a much better choice than continuing to smoke cigarettes for adults who already smoke,” she said. “Our vision is that these products will one day replace cigarettes.”
While Donnica acknowledges this new initiative will take time, she and her team are making efforts to accelerate the transition.
“We are increasingly shifting resources to the development, assessment, and commercialization of smoke-free products,” she said. “We are also sharing our progress with scientists, governments, and other stakeholders to facilitate dialogue and independent verification to provide information that helps shape regulatory frameworks.”
She emphasized they're also continuing to build on their current organizational strengths, as well as integrating new capabilities and skill sets to meet the needs of their changing company.
In 2018, PMI invested $383 million in research and development — 92 percent of which was dedicated to smoke-free products.
“This is significant considering we have not yet launched these products in a majority of countries,” she said.
According to Donnica, they've also set clear transformation targets and monitor and report on that progress annually.
“By 2025, our aspiration is that more than 40-million adult smokers will have switched to our smoke-free products and stopped smoking,” she said. “We also want our smoke-free products to represent more than 30 percent of our total shipment ratio and 38 to 42 percent of our total net revenues.”
One of the key components of PMI's smoke-free future and hitting those numbers is a campaign called “Unsmoke.”
“The mission of Unsmoke is crystal clear: If you don't smoke, don't start,” Donnica said. “If you smoke, quit. If you don't quit, change. That's unsmoking.”
She said this call to action stems from the knowledge that despite global efforts to encourage people to quit or not to start smoking, the World Health Organization predicts that there will still be approximately the same number of people who smoke in 2025 as do today.
Now, they're starting to see results with an estimated 6.6-million adult smokers having stopped smoking and switched to IQOS (their alternative to cigarettes).
According to Donnica, smoke-free products represented 13.8 percent of their total net revenues. And, in three countries, those revenues exceeded those of their combustible products.
But, she emphasized that cigarettes with smoke-free products will take time and does not depend only on PMI's efforts.
“For example, governments have a role to play by defining policies that encourage smokers to quit,” she said. “It's also important to have more voices encouraging those who don't quit to switch, because ultimately, smokers will have to completely switch to these products.”
Donnica Hawes-Saunders has been a member of the CSR Board since 2019. You can follow her on LinkedIn.